HP Inc. (NYSE: HPQ) (“HP” or the “Company”) announced today that it
commenced a private exchange offer to certain eligible holders (the
“Exchange Offer”) for any and all outstanding notes (the “Poly
Notes”) issued by Plantronics, Inc. (NYSE: POLY) (“Poly”) for up to
$500,000,000 aggregate principal amount of new notes to be issued
by the Company (the “HP Notes”) and cash.
As previously announced, on March 25, 2022, the
Company entered into a definitive agreement (“Merger Agreement”) to
acquire Poly in an all-cash transaction for $40 per share, implying
a total enterprise value of $3.3 billion, inclusive of Poly’s net
debt (the “Acquisition”). Pursuant to the Merger Agreement, a
subsidiary of HP will merge with and into Poly, with Poly surviving
the Acquisition as a wholly owned subsidiary of HP. The Exchange
Offer and Consent Solicitation (as defined herein) are being
conducted in connection with, and are conditioned upon, the
completion of the Acquisition.
In conjunction with the Exchange Offer, HP is
concurrently soliciting consents (the “Consent Solicitation” and,
together with the Exchange Offer, the “Exchange Offer and Consent
Solicitation”) to adopt certain proposed amendments to the
indenture governing the Poly Notes (the “Poly Indenture”) to, among
other things, eliminate from the Poly Indenture (i) substantially
all of the restrictive covenants, (ii) certain of the events which
may lead to an “Event of Default”, (iii) the restrictions on Poly
consolidating with or merging into another person or conveying,
transferring or leasing all or any of its properties and assets to
any person, (iv) the reporting covenant and (v) the obligation to
offer to purchase the Poly Notes upon certain change of control
transactions (including the Acquisition) (collectively, the
“Proposed Amendments”). The Proposed Amendments require the consent
of the holders of not less than a majority in principal amount of
the Poly Notes outstanding (the “Requisite Consent”). If the
Requisite Consent is obtained, any remaining Poly Notes not
tendered and exchanged for HP Notes will be governed by the amended
indenture. The Exchange Offer and the Consent Solicitation are
subject to the same conditions, and any waiver of a condition by HP
with respect to the Exchange Offer will automatically waive such
condition with respect to the Consent Solicitation, as
applicable.
Upon consummation, the Acquisition will
constitute a change of control under the Poly Indenture.
Accordingly, pursuant to the existing terms of the Poly Indenture,
HP would be obligated to make an offer to purchase the Poly Notes
then outstanding at a purchase price equal to 101% of the principal
amount of the Poly Notes thereof, plus accrued and unpaid interest,
if any, to (but excluding) the date of repurchase, in connection
with the consummation of the Acquisition (the “Poly
Post-Acquisition Change of Control Offer”). However, if the
Proposed Amendments are adopted, HP will no longer be obligated to
make a Poly Post-Acquisition Change of Control Offer. The terms of
the HP Notes will require HP to make an offer to purchase the HP
Notes at a purchase price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest to (but excluding) the
date of repurchase in connection with the consummation of the
Acquisition.
The following table sets forth the Consent
Payment (as defined herein), Exchange Consideration (as defined
herein), Early Participation Premium (as defined herein) and Total
Consideration (as defined herein) for the Poly Notes:
Title ofPoly Notes |
CUSIP/ISINNos. |
Maturity Date |
PrincipalAmount Outstanding |
Consent Payment(1) |
ExchangeConsideration(2) |
EarlyParticipationPremium(3) |
TotalConsideration(4) |
4.750% Senior Notes due 2029 |
727493AC2 (144A) / U7260PAB7 (Reg S); US727493AC24 (144A) /
USU7260PAB77 (Reg S) |
03/01/2029 |
$500,000,000 |
$2.50 in cash |
$970 principal amount of HP 4.750% Senior Notes due 2029* |
$30 principal amount of HP 4.750% Senior Notes due 2029* |
$1,000 principal amount of HP 4.750% Senior Notes due 2029* and
$2.50 in cash |
______________________
(1) |
For each
$1,000 principal amount of Poly Notes accepted for exchange. On the
Settlement Date (as defined herein), the Consent Payment will be
paid to each eligible holder that validly tendered and did not
validly withdraw Poly Notes at or prior to the Early Participation
Date (as defined herein), even if such person is no longer the
beneficial owner of such Poly Notes on the Expiration Date (as
defined herein). |
(2) |
For each $1,000 principal amount of Poly Notes accepted for
exchange. |
(*) |
The HP Notes will include a put right at 101% triggered upon
consummation of the Acquisition. |
(3) |
For each $1,000 principal amount of Poly Notes validly tendered
and not validly withdrawn at or prior to the Early Participation
Date. On the Settlement Date, the Early Participation Premium will
be paid to each eligible holder who is a beneficial owner of such
Poly Notes at the Expiration Date, and who validly tendered such
Poly Notes at or prior to the Early Participation Date and did not
validly withdraw such Poly Notes at or prior to the Expiration
Date. |
(4) |
For each $1,000 principal amount of Poly Notes validly tendered
and not validly withdrawn at or prior to the Early Participation
Date. Includes the Consent Payment, $970 of Exchange Consideration
and the Early Participation Premium. For the avoidance of doubt,
unless the Exchange Offer is amended, in no event will any holder
of Poly Notes receive more than $1,000 aggregate principal amount
of HP Notes for each $1,000 aggregate principal amount of Poly
Notes accepted for exchange. |
The Exchange Offer and Consent Solicitation is
being made pursuant to the terms and subject to the conditions set
forth in the confidential exchange memorandum and consent
solicitation statement dated June 27, 2022 (the “Offering
Memorandum and Consent Solicitation Statement”), and is conditioned
upon, among other things, the closing of the Acquisition. The
Exchange Offer will expire at 11:59 p.m., New York City time, on
July 25, 2022, unless extended or terminated by HP (such date and
time, as may be extended, the “Expiration Date”). Eligible holders
of Poly Notes who validly tender and not have validly withdrawn
their Poly Notes at or prior to 5:00 p.m., New York time, on July
11, 2022, unless extended or terminated (such date and time, as the
same may be extended, the “Early Participation Date”), will be
eligible to receive the Early Participation Premium (as defined
herein). A consent may not be revoked after the earlier of (i) 5:00
p.m., New York City time, on July 11, 2022, unless extended or
terminated, and (ii) the date the supplemental indenture to the
Poly Indenture implementing the Proposed Amendments is executed
(the earlier of (i) and (ii), the “Consent Revocation
Deadline”). The Consent Solicitation will expire at the Early
Participation Date. The settlement date (the “Settlement Date”) for
the Exchange Offer will be promptly after the Expiration Date and
is expected to occur no earlier than the closing of the
Acquisition, which is expected to be completed by the end of the
calendar year 2022, subject to customary closing conditions,
including regulatory approvals.
For each $1,000 principal amount of Poly Notes
validly tendered and not validly withdrawn at or prior to the Early
Participation Date, eligible holders of Poly Notes will be eligible
to receive the total consideration set out in the table above (the
“Total Consideration”), which includes a consent payment of $2.50
in cash (the “Consent Payment”) and an early participation premium,
payable in principal amount of HP Notes, of $30 (the “Early
Participation Premium”). To be eligible to receive the Total
Consideration, eligible holders must have validly tendered and not
withdrawn their Poly Notes at or prior to the Early Participation
Date and beneficially own such Poly Notes at the Expiration Date.
For the avoidance of doubt, unless the Exchange Offer is amended,
in no event will any holder of Poly Notes receive more than $1,000
aggregate principal amount of HP Notes for each $1,000 aggregate
principal amount of Poly Notes accepted for exchange.
For each $1,000 principal amount of Poly Notes validly tendered
and not validly withdrawn after the Early Participation Date and
prior to the Expiration Date, eligible holders of Poly Notes will
be eligible to receive $970 principal amount of HP Notes (the
“Exchange Consideration”). To be eligible to receive the Exchange
Consideration, eligible holders must validly tender (and not
validly withdraw) their Poly Notes at or prior to the Expiration
Date. If an eligible holder validly tenders and has not withdrawn
their Poly Notes at or prior to the Early Participation Date and
beneficially owns such Poly Notes at the Expiration Date, the
eligible holder will instead receive the Total Consideration. An
eligible holder that validly tenders Poly Notes and delivers (and
does not validly revoke) a consent prior to the Early Participation
Date, but withdraws such Poly Notes after the Early Participation
Date but prior to the Expiration Date, will receive the Consent
Payment, even if such eligible holder is no longer the beneficial
owner of such Poly Notes on the Expiration Date.
No accrued and unpaid interest is payable upon acceptance of any
Poly Notes in the Exchange Offer and Consent Solicitation. The
interest rate, interest payment dates, maturity and redemption
terms of the HP Notes to be issued by HP in the Exchange Offer will
be the same as those of the Poly Notes to be exchanged. The first
interest payment on the HP Notes will include the accrued and
unpaid interest from the date of the last interest payment made
under the Poly Indenture on the Poly Notes tendered in exchange
therefor so that a tendering eligible holder will receive the same
interest payment it would have received had its Poly Notes not been
tendered in the Exchange Offer and Consent Solicitation; provided
that the amount of accrued and unpaid interest shall only be equal
to the accrued and unpaid interest on the principal amount of Poly
Notes equal to the aggregate principal amount of HP Notes an
eligible holder receives, which may be less than the principal
amount of corresponding Poly Notes tendered for exchange if such
holder tenders (and does not subsequently withdraw) its Poly Notes
after the Early Participation Date. For the avoidance of doubt, to
the extent the interest payment date for the Poly Notes occurs
prior to the Settlement Date, holders who validly tendered and did
not validly withdraw Poly Notes in the Exchange Offer and Consent
Solicitation will receive accrued and unpaid interest on such
interest payment date as required by the terms of the Poly
Indenture.
Documents relating to the Exchange Offer and
Consent Solicitation will only be distributed to eligible holders
of Poly Notes who complete and return an eligibility certificate
confirming that they are either a “qualified institutional buyer”
under Rule 144A or not a “U.S. person” and outside the United
States under Regulation S for purposes of applicable securities
laws, and a non U.S. qualified offeree (as defined in the Offering
Memorandum and Consent Solicitation Statement). The complete terms
and conditions of the Exchange Offer and Consent Solicitation are
described in the Offering Memorandum and Consent Solicitation
Statement, copies of which may be obtained by contacting D.F. King
& Co., Inc., the exchange agent and information agent in
connection with the Exchange Offer and Consent Solicitation, at
(888) 605-1956 (toll-free) or (212) 269-5550 (banks and brokers),
or by email at hp@dfking.com. The eligibility certificate is
available electronically at: www.dfking.com/hp and is also
available by contacting D.F. King & Co., Inc.
This press release does not constitute an offer
to sell or purchase, or a solicitation of an offer to sell or
purchase, or the solicitation of tenders or consents with respect
to, any security. No offer, solicitation, purchase or sale will be
made in any jurisdiction in which such an offer, solicitation or
sale would be unlawful. The Exchange Offer and Consent Solicitation
is being made solely pursuant to the Offering Memorandum and
Consent Solicitation Statement and only to such persons and in such
jurisdictions as are permitted under applicable law.
The HP Notes offered in the Exchange Offer have
not been registered under the Securities Act of 1933, as amended,
or any state securities laws. Therefore, the HP Notes may not be
offered or sold in the United States absent registration or an
applicable exemption from the registration requirements of the
Securities Act of 1933, as amended, and any applicable state
securities laws.
About HP Inc.
HP Inc. (NYSE: HPQ) is a technology company that
believes one thoughtful idea has the power to change the world. Its
product and service portfolio of personal systems, printers, and 3D
printing solutions helps bring these ideas to life. Visit
http://www.hp.com.
Forward-looking statements
This document contains forward-looking statements based on
current expectations and assumptions that involve risks and
uncertainties. If the risks or uncertainties ever materialize or
the assumptions prove incorrect, the results of HP and its
consolidated subsidiaries may differ materially from those
expressed or implied by such forward-looking statements and
assumptions.
All statements other than statements of historical fact are
statements that could be deemed forward-looking statements,
including, but not limited to, any statements regarding the
consummation of the Acquisition; the potential impact of the
COVID-19 pandemic and the actions by governments, businesses and
individuals in response to the situation; margins, expenses,
effective tax rates, net earnings, cash flows, benefit plan
funding, deferred taxes, share repurchases, foreign currency
exchange rates or other financial items; any projections of the
amount, timing or impact of cost savings or restructuring and other
charges, planned structural cost reductions and productivity
initiatives; any statements of the plans, strategies and objectives
of management for future operations, including, but not limited to,
our business model and transformation, our sustainability goals,
our go-to-market strategy, the execution of restructuring plans and
any resulting cost savings, net revenue or profitability
improvements or other financial impacts; any statements concerning
the expected development, demand, performance, market share or
competitive performance relating to products or services; any
statements concerning potential supply constraints, component
shortages, manufacturing disruptions or logistics challenges; any
statements regarding current or future macroeconomic trends or
events and the impact of those trends and events on HP and its
financial performance; any statements regarding pending
investigations, claims, disputes or other litigation matters; any
statements of expectation or belief, including with respect to the
timing and expected benefits of acquisitions and other business
combination and investment transactions; and any statements of
assumptions underlying any of the foregoing. Forward-looking
statements can also generally be identified by words such as
“future,” “anticipates,” “believes,” “estimates,” “expects,”
“intends,” “plans,” “predicts,” “projects,” “will,” “would,”
“could,” “can,” “may,” and similar terms.
Risks, uncertainties and assumptions include factors relating to
the consummation of the Acquisition and HP’s ability to meet
expectations regarding the accounting and tax treatments of the
Acquisition; the effects of the COVID-19 pandemic and the actions
by governments, businesses and individuals in response to the
situation, the effects of which may give rise to or amplify the
risks associated with many of these factors listed here; the need
to manage (and reliance on) third-party suppliers, including with
respect to component shortages, and the need to manage HP’s global,
multi-tier distribution network, limit potential misuse of pricing
programs by HP’s channel partners, adapt to new or changing
marketplaces and effectively deliver HP’s services; HP’s ability to
execute on its strategic plan, including the previously announced
initiatives, business model changes and transformation; execution
of planned structural cost reductions and productivity initiatives;
HP’s ability to complete any contemplated share repurchases, other
capital return programs or other strategic transactions; the
competitive pressures faced by HP’s businesses; risks associated
with executing HP’s strategy and business model changes and
transformation; successfully innovating, developing and executing
HP’s go-to-market strategy, including online, omnichannel and
contractual sales, in an evolving distribution, reseller and
customer landscape; the development and transition of new products
and services and the enhancement of existing products and services
to meet evolving customer needs and respond to emerging
technological trends; successfully competing and maintaining the
value proposition of HP’s products, including supplies; challenges
to HP’s ability to accurately forecast inventories, demand and
pricing, which may be due to HP’s multi-tiered channel, sales of
HP’s products to unauthorized resellers or unauthorized resale of
HP’s products or our uneven sales cycle; integration and other
risks associated with business combination and investment
transactions; the results of the restructuring plans, including
estimates and assumptions related to the cost (including any
possible disruption of HP’s business) and the anticipated benefits
of the restructuring plans; the protection of HP’s intellectual
property assets, including intellectual property licensed from
third parties; the hiring and retention of key employees; the
impact of macroeconomic and geopolitical trends, changes and
events, including the Russian invasion of Ukraine and its regional
and global ramifications and the effects of inflation; risks
associated with HP’s international operations; the execution and
performance of contracts by HP and its suppliers, customers,
clients and partners, including logistical challenges with respect
to such execution and performance; changes in estimates and
assumptions HP makes in connection with the preparation of its
financial statements; disruptions in operations from system
security risks, data protection breaches, cyberattacks, extreme
weather conditions or other effects of climate change, medical
epidemics or pandemics such as the COVID-19 pandemic, and other
natural or manmade disasters or catastrophic events; the impact of
changes to federal, state, local and foreign laws and regulations,
including environmental regulations and tax laws; potential
impacts, liabilities and costs from pending or potential
investigations, claims and disputes; and other risks that are
described (i) in “Risk Factors” in the Offering Memorandum and
Consent Solicitation Statement and (ii) in our filings with the
SEC, including but not limited to the risks described under the
caption “Risk Factors” contained in Item 1A of Part I of our Annual
Report on Form 10-K for the fiscal year ended October 31, 2021, as
well as in Item 1A of Part II of our Quarterly Reports on Form 10-Q
for the fiscal quarter ended January 31, 2022 and the fiscal
quarter ended April 30, 2022. HP does not assume any obligation or
intend to update these forward-looking statements.
Media Contacts
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